Aug. 18, 2003 – Gloria Waterman, chair of the V.I. Housing Authority interim board of governors, says she is hopeful that federal officials will find the board's explanation of VIHA's financial dealings acceptable and allow the board to proceed with its version of a recovery plan.
"I'm thinking positively," Waterman said.
Her optimism is not shared by Sen. Emmett Hansen II, who chairs the Legislature's Housing Parks and Recreation Committee.
Hansen said the very existence of the interim board is viewed as problematic by the U.S. Department of Housing and Urban Development and led HUD to withdraw its request that VIHA go into voluntary federal receivership. HUD provides most of the Housing Authority's funding.
On Friday, Hansen held the first in a series of meetings at public housing communities to discuss with residents what to expect if VIHA should go into federal receivership.
On Monday, he accused the interim board members of being more concerned about their reputation in Washington than with the residents who are essentially their customers. And he said the V.I. government doesn't seem to understand about working with the federal government, rather than challenging it at every turn.
"HUD first wanted voluntary transfer of authority, but the Turnbull administration did not want that. They wanted to put in an interim board," he pointed out.
There is no provision for such a thing as an interim board in HUD's operational rules, he said, and the closest thing HUD could come up with to what the V.I. administration wanted was to get housing officials to work with a team from HUD's Troubled Agency Recovery Center. HUD offered this, and its trouble-shooters spent last week in the territory.
Before the team was to meet with the board, its leader was suddenly called back to Washington. Some interpreted that as a move by HUD to send a message to the Virgin Islands. Hansen, however, doesn't see it that way. "When you've got all the marbles," he said, you don't have to play games.
In a report that was due at 5 p.m. Friday — and was delivered to HUD in Washington on time, according to Waterman — VIHA officials were to answer charges that the authority failed to record the receipt of some federal funds and failed to account for how other federal money was spent. The deadline for the agency to respond was initially Aug. 11 but was extended five days at the request of the VIHA interim board.
Waterman, who also holds the position of assistant to Gov. Charles W. Turnbull on St. Croix, said each board member worked on a component of the response. She said on Monday that she had not seen the final form of the reply but expected to review the entire document later in the day at a meeting with Lorelei Farrington, VIHA acting executive director.
She would not comment on the contents of the response, saying it would not be fair for HUD officials to read all about it in the press before they'd had a chance to look things over for themselves.
Late Monday afternoon, Donna White, HUD spokeswoman for Indian and public housing, said the Housing Authority response had been received and was under review.
What comes next from Washington, and when, Waterman said, is anybody's guess.
Hansen has decided to use the wait time to open an dialogue with public housing residents. On Friday at Ludvig Harrigan Court on St. Croix, he held the first of a series of planned town meetings on what residents can be expect under federal receivership.
While he does not know for sure that receivership will be the option chosen by HUD, Hansen said, it's the one that's most likely. "We going into the housing communities to let them know about the possible effects of receivership, which the Housing Authority is sliding into," he said Monday.
Another town meeting is set for this Friday at the Alfonso "Piggy" Gerard housing community on St. Croix. On St. Thomas, a meeting is being planned at Paul M. Pearson Gardens.
When asked what she thought about Hansen's meetings, Waterman said she had not been told they were taking place. But she did say she had received a copy of a petition being circulated among some housing residents calling for the return of VIHA's ousted executive director, Ray Fonseca.
"I cannot respond to that. All I know is I saw a copy of the petition they sent. I just looked at that, and I put it aside," Waterman said.
She said she has concerns about the residents' housing and hopes HUD will give the interim board a chance to turn things around at VIHA. But she said she does not think now is the time to talk to the residents. "How can I give them any information when I don't know what the decision is going to be?" she said.
Compounding the difficulty in which the Housing Authority finds itself, HUD announced last week that its Capital Fund allotments for VIHA would be reduced by $4.8 million this year because the agency had failed to begin the scheduled repayment of $12 million emergency loans made in 1999 and 2001.
Waterman said the first payment of $2 million was supposed to have been made in January, but VIHA missed making that payment. The total amount "was supposed to be paid in six years. We missed one payment on one loan, due Jan. 1, 2003," she said.
As a result, federal authorities demanded the collection of both portions of the loan at once and more than doubled the scheduled installments.
Assistant HUD Secretary Michael Liu further warned VIHA, in a letter read at the Thursday interim board meeting, that if any discrepancies were discovered in the agency's record keeping with regard to how the loan money was spent, HUD would demand immediate repayment of the entire $12 million.
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